<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

GENERAL

Pamrapo Bancorp, Inc. (the "Company") owns 100% of the issued and outstanding
stock of Pamrapo Savings Bank, SLA (the "Bank"), which is the primary asset of
the Company. The Company's business is conducted principally through the Bank.

BUSINESS OF THE COMPANY

The Bank's principal business has been and continues to be attracting retail
deposits from the general public and investing those deposits, together with
funds generated from operations, primarily in one-to-four family, owner occupied
residential mortgage loans. In addition, in times of low loan demand, the Bank
will invest in mortgage-backed securities to supplement its lending portfolio.
The Bank also invests, to a lesser extent, in multi-family residential mortgage
loans, commercial real estate loans, home equity and second mortgage loans and
consumer loans.

The earnings of the Bank depend primarily upon the level of net interest income,
which is the difference between the interest earned on assets such as loans,
mortgage-backed securities, investments and other interest-earning assets and
the interest paid on liabilities such as deposits and borrowings. Net interest
income is affected by many factors, including regulatory, economic and
competitive factors that influence interest rates, loan demand and deposit flow.
Net interest income is also affected by the amount, composition and relative
interest rates of the Bank's assets and liabilities and by the repricing of such
assets and liabilities.

The Bank is vulnerable to interest rate fluctuations to the extent that its
interest-bearing liabilities mature or reprice more rapidly than its
interest-earning assets. Such asset/liability structure may result in lower net
interest income during periods of rising interest rates and may be beneficial in
times of declining interest rates. The Bank's net income is also affected by
provisions for loan losses, non-interest income, non-interest expenses and
income taxes.

FINANCIAL CONDITION

The Company's consolidated assets at December 31, 2002 totaled $588.7 million,
which represents an increase of $49.1 million or 9.10% when compared to $539.6
million at December 31, 2001, primarily due to increases in the loans receivable
and mortgage-backed securities.

Securities available for sale decreased $761,000 or 14.35% to $4.5 million at
December 31, 2002 when compared to $5.3 million at December 31, 2001. The
decrease during the year ended December 31, 2002, resulted primarily from
proceeds from repayments on securities available for sale amounting to $895,000
which offset purchases of securities available for sale of $44,000 along with an
increase in unrealized gain on securities available for sale of $98,000.

Investment securities held to maturity increased $2.1 million or 42.00% to $7.1
million at December 31, 2002 when compared to $5.0 million at December 31, 2001.
The increase during the year ended December 31, 2002 resulted primarily from
purchases of investment securities held to maturity of $4.1 million, which
offset proceeds from calls of such securities of $2.0 million.

Mortgage-backed securities held to maturity increased $23.7 million or 19.36% to
$146.1 million at December 31, 2002 from $122.4 million at December 31, 2001.
The increase during the year ended December 31, 2002 resulted primarily from
purchases of mortgage-backed securities of $68.4 million, sufficient to offset
principal repayments of $44.5 million on mortgage-backed securities.

Net loans amounted to $389.9 million and $369.2 million at December 31, 2002 and
2001, respectively, which represents an increase of $20.7 million or 5.61%,
primarily due to loan originations exceeding loan principal repayments by $21.3
million.

Foreclosed real estate amounted to $155,000 and $238,000 at December 31, 2002
and 2001, respectively. At December 31, 2002, foreclosed real estate consisted
of one commercial property which is under contract for sale. At December 31,
2001, foreclosed real estate consisted of one residential property and one
commercial property.

Total deposits at December 31, 2002 increased $28.9 million or 6.94% to $445.5
million compared to $416.6 million at December 31, 2001.

Advances from the Federal Home Loan Bank of New York ("FHLB-NY") totaled $84.3
million and $67.3 million

                                                      Pamrapo Bancorp, Inc.    9

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

at December 31, 2002 and 2001, respectively. The net increase of $17.0 million
during the year ended December 31, 2002, resulted from new advances from the
FHLB-NY, which were used to fund loan commitments, purchase of mortgage-backed
securities and for general corporate purposes.

Stockholders' equity amounted to $50.8 million and $47.5 million at December 31,
2002 and 2001, respectively. During the years ended December 31, 2002 and 2001,
net income of $7.1 million and $5.0 million, respectively, was recorded and cash
dividends of $3.9 million and $3.7 million, respectively, were paid on the
Company's common stock. During the years ended December 31, 2002 and 2001, the
Company repurchased 20,600 and 40,888 shares (on a post-split basis),
respectively, of its common stock for $279,000 and $416,000, respectively, under
a stock repurchase program.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

NET INCOME

Net income increased by $2.1 million or 42.00% to $7.1 million during the year
ended December 31, 2002 compared to $5.0 million for the year ended December
31, 2001. The increase in net income during the 2002 period was primarily due to
increases in total interest income of $1.4 million and in non-interest income of
$645,000, along with a decrease in total interest expense of $2.3 million, which
more than offset increases in non-interest expense of $157,000, provision for
loan losses of $175,000 and income taxes of $1.9 million.

INTEREST INCOME

Interest income on loans during the year ended December 31, 2002 increased by
$1.8 million or 6.55% to $29.3 million when compared to $27.5 million during
2001. During the years ended December 31, 2002 and 2001, the yield earned on the
loan portfolio was 7.61% and 8.07%, respectively. The average balance of loans
outstanding during the years ended December 31, 2002 and 2001, totaled $384.7
million and $340.3 million, respectively, representing an increase of $44.4
million or 13.05%.

Interest on mortgage-backed securities decreased $160,000 or 2.02% during the
year ended December 31, 2002 to $7.8 million compared to $7.9 million for 2001.
During the years ended December 31, 2002 and 2001, the average balance of
mortgage-backed securities totaled $127.7 million and $121.6 million,
respectively, resulting in a net increase of $6.1 million or 5.02%. The yield
earned on the mortgage-backed securities portfolio was 6.08% and 6.52% during
2002 and 2001, respectively. Interest earned on investment securities decreased
by $78,000 or 13.06% to $518,000 for the year ended December 31, 2002, when
compared to $596,000 for 2001. The decrease during the year ended December
31, 2002, resulted from a decrease of $1.7 million or 18.97% in the average
balance of the investment securities portfolio, sufficient to offset an increase
of forty-eight basis points in the yield earned on the investment securities
portfolio from 6.75% in 2001 to 7.23% in 2002.

Interest on other interest-earning assets amounted to $508,000 and $623,000
during the years ended December 31, 2002 and 2001, respectively. The average
balance of other interest-earning assets outstanding increased $13.7 million or
116.10% to $25.5 million in 2002 from $11.8 million in 2001, sufficient to
offset a decrease of 327 basis points in the yield earned on other
interest-earning assets to 1.99% in 2002 from 5.26% in 2001.

INTEREST EXPENSE

Interest on deposits decreased $3.4 million or 22.82% to $11.5 million during
the year ended December 31, 2002 compared to $14.9 million for 2001. The
decrease during 2002 was attributable to a decrease of 105 basis points in the
Bank's average cost of interest-bearing deposits to 2.86% for 2002 from 3.91%
for 2001 partially offset by an increase of $19.9 million or 5.22% in the
average balance of interest-bearing deposits outstanding.

Interest on advances and other borrowed money increased $1.2 million or 46.15%
to $3.8 million during the year ended December 31, 2002 compared to $2.6 million
for 2001. The increase during 2002 was attributable to an increase of $30.0
million or 65.81% in the average balance of advances and other borrowings
outstanding, partially offset by a decrease of seventy-five basis points in the
Bank's cost of borrowings from 5.79% for 2001 to 5.04% for 2002.

10   Pamrapo Bancorp, Inc.

<PAGE>

NET INTEREST INCOME

Net interest income for the year ended December 31, 2002, increased $3.7 million
or 19.37% to $22.8 million for 2002 as compared to $19.1 million for 2001. The
Bank's net interest rate spread increased from 3.48% in 2001 to 3.78% in 2002
and its interest rate margin increased from 3.95% in 2001 to 4.18% in 2002. The
increase in net interest rate spread primarily resulted from a ninety basis
point decrease in the cost of average interest-bearing liabilities to 3.21% in
2002 from 4.11% in 2001, sufficient to offset a sixty-one basis point decrease
in the yield on interest-earning assets from 7.59% in 2001 to 6.98% in 2002.

PROVISION FOR LOAN LOSSES

During the years ended December 31, 2002 and 2001, the Bank provided $634,000
and $459,000, respectively, for loan losses. At December 31, 2002 and 2001, the
Bank's loan portfolio included loans totaling $2.7 million and $3.3 million,
respectively, which were delinquent ninety days or more. The Bank maintains an
allowance for loan losses based on management's evaluation of the risk inherent
in its loan portfolio which gives due consideration to changes in general market
conditions and in the nature and volume of the Bank's loan activity. The
allowance for loan losses amounted to $2.55 million at December 31, 2002,
representing .65% of total loans and 94.41% of loans delinquent ninety days or
more compared to an allowance of $2.15 million at December 31, 2001,
representing .57% of total loans and 65.95% of loans delinquent ninety days or
more. During the years ended December 31, 2002 and 2001, the Bank charged off
loans aggregating $244,000 and $273,000, respectively. The Bank monitors its
loan portfolio and intends to continue to provide for loan losses based on its
ongoing periodic review of the loan portfolio and general market conditions.

NON-INTEREST INCOME

Non-interest income increased by $645,000 or 33.58% to $2.6 million during the
year ended December 31, 2002 as compared to $1.9 million for 2001. The increase
in non-interest income during 2002 resulted primarily from increases in fees and
service charges of $85,000, gain on sale of branches of $479,000 and
miscellaneous income of $81,000. During the year ended December 31, 2002, the
Bank sold deposits of $21.8 million, furniture, fixtures and leasehold
improvements of $221,000 and account loans of $148,000 at its two Brick, New
Jersey, branch offices to another financial institution. As a result of the
sale, the Bank recognized a net gain of $479,000.

NON-INTEREST EXPENSES

Non-interest expenses increased $156,000 to $12.8 million during the year ended
December 31, 2002 compared to $12.6 million for 2001. Occupancy, federal
insurance premium, advertising, equipment, loss on foreclosed real estate, and
miscellaneous expenses decreased $121,000, $1,000, $53,000, $72,000, $7,000 and
$394,000, respectively, during the year ended December 31, 2002, which were more
than offset by increases in salaries and employee benefits of $804,000.

INCOME TAXES

Income tax expense totaled $4.8 million and $2.9 million during the years ended
December 31, 2002 and 2001, respectively. The increase in 2002 resulted
primarily from increases in pre-tax income of $4.0 million and an increase in
the New Jersey income tax rate from 3% to 9% as a result of a tax law change.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

NET INCOME

Net income increased by $524,000 or 11.71% to $5.0 million during the year ended
December 31, 2001 compared to $4.5 million for the year ended December 31, 2000.
The increase in net income during the 2001 period was primarily due to increases
in total interest income of $3.4 million and in non-interest income of $345,000,
which more than offset increases in total interest expense of $2.0 million,
non-interest expense of $645,000, provision for loan losses of $251,000 and
income taxes of $339,000.

INTEREST INCOME

Interest income on loans during the year ended December 31, 2001 increased by
$4.0 million or 17.02% to $27.5 million when compared to $23.5 million during
2000. During the years ended December 31, 2001 and 2000, the yield earned on the
loan portfolio was 8.07% and 8.27%, respectively. The average balance of

                                                      Pamrapo Bancorp, Inc.   11

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

loans outstanding during the years ended December 31, 2001 and 2000, totaled
$340.3 million and $284.6 million, respectively, representing an increase of
$55.7 million or 19.57%.

Interest on mortgage-backed securities decreased $189,000 or 2.33% during the
year ended December 31, 2001 to $7.9 million compared to $8.1 million for 2000.
During the year ended December 31, 2001, the average balance of mortgage-backed
securities outstanding decreased $4.2 million or 3.34% to $121.6 million when
compared to $125.8 million for 2000. The yield earned on the mortgage-backed
securities portfolio was 6.52% and 6.45% during 2001 and 2000, respectively.
Interest earned on investment securities decreased by $133,000 or 18.24% to
$596,000 for the year ended December 31, 2001, when compared to $729,000 for
2000. The decrease during the year ended December 31, 2001, resulted from a
decrease of $547,000 or 5.83% in the average balance of the investment
securities portfolio, along with a decrease of one hundred and two basis points
in the yield earned on the investment securities portfolio from 7.77% in 2000 to
6.75% in 2001.

Interest on other interest-earning assets amounted to $623,000 and $780,000
during the years ended December 31, 2001 and 2000, respectively. The average
balance of other interest-earning assets outstanding decreased $1.4 million or
10.23% to $11.8 million in 2001 from $13.2 million in 2000, along with a
decrease of sixty-five basis points in the yield earned on other
interest-earning assets from 5.91% in 2000 to 5.26% in 2001.

INTEREST EXPENSE

Interest on deposits increased $1.1 million or 7.97% to $14.9 million during the
year ended December 31, 2001 compared to $13.8 million for 2000. The increase
during 2001 was attributable to an increase of $35.4 million or 10.24% in the
average balance of interest-bearing deposits outstanding partially offset by a
decrease of seven basis points in the Bank's average cost of interest-bearing
deposits from 3.98% for 2000 to 3.91% for 2001.

Interest on advances and other borrowed money increased $898,000 or 51.70% to
$2.6 million during the year ended December 31, 2001 compared to $1.7 million
for 2000. The increase during 2001 was attributable to an increase of $15.9
million in the average balance of advances and other borrowings outstanding,
partially offset by a decrease of eight basis points in the Bank's cost of
borrowings from 5.87% for 2000 to 5.79% for 2001.

NET INTEREST INCOME

Net interest income for the year ended December 31, 2001, increased $1.4 million
or 7.91% to $19.1 million for 2001 as compared to $17.7 million for 2000. The
Bank's net interest rate spread decreased from 3.53% in 2000 to 3.48% in 2001
and its interest rate margin decreased from 4.10% in 2000 to 3.95% in 2001. The
decreased net interest rate spread primarily resulted from a seven basis point
decrease in the yield on average interest-earning assets to 7.59% in 2001 from
7.66% in 2000, sufficient to offset a two basis point decrease in the cost of
interest-bearing liabilities from 4.13% in 2000 to 4.11% in 2001.

PROVISION FOR LOAN LOSSES

During the years ended December 31, 2001 and 2000, the Bank provided $459,000
and $208,000, respectively, for loan losses. At December 31, 2001 and 2000, the
Bank's loan portfolio included loans totaling $3.3 million and $4.1 million,
respectively, which were delinquent ninety days or more. The Bank maintains an
allowance for loan losses based on management's evaluation of the risk inherent
in its loan portfolio which gives due consideration to changes in general market
conditions and in the nature and volume of the Bank's loan activity. The
allowance for loan losses amounted to $2.15 million at December 31, 2001,
representing .57% of total loans and 65.95% of loans delinquent ninety days or
more compared to an allowance of $1.95 million at December 31, 2000,
representing .62% of total loans and 47.74% of loans delinquent ninety days or
more. During the years ended December 31, 2001 and 2000, the Bank charged off
loans aggregating $273,000 and $268,000, respectively. The Bank monitors its
loan portfolio and intends to continue to provide for loan losses based on its
ongoing periodic review of the loan portfolio and general market conditions.

NON-INTEREST INCOME

Non-interest income increased by $345,000 or 21.89% to $1.9 million during the
year ended December 31, 2001 as compared to $1.6 million for

12   Pamrapo Bancorp, Inc.

<PAGE>

2000. The increase in non-interest income during 2001 resulted primarily from
increases in fees and service charges of $173,000 and miscellaneous income of
$172,000.

NON-INTEREST EXPENSES

Non-interest expenses increased $645,000 or 5.38% to $12.6 million during the
year ended December 31, 2001 compared to $12.0 million for 2000. Salaries and
employee benefits, occupancy, equipment and miscellaneous expenses increased
$32,000, $88,000, $241,000 and $443,000, respectively, during the year ended
December 31, 2001, which were partially offset by decreases in advertising,
federal insurance premium, loss on foreclosed real estate and amortization of
intangibles of $60,000, $2,000, $36,000 and $61,000, respectively.

INCOME TAXES

Income tax expense totaled $2.9 million and $2.6 million during the years ended
December 31, 2001 and 2000, respectively. The increase in 2001 resulted
primarily from an increase in pre-tax income of $864,000.

LIQUIDITY AND CAPITAL RESOURCES

The Bank's primary sources of funds are deposits, amortization and prepayments
of loan and mortgage-backed securities principal, FHLB-NY advances, maturities
of investment securities and funds provided from operations. While scheduled
loan and mortgage-backed securities amortization and maturities of investment
securities are a relatively predictable source of funds, deposit flows and loan
and mortgage-backed securities prepayments are greatly influenced by market
interest rates, economic conditions and competition.

The Bank is required to maintain sufficient liquidity to ensure its safe and
sound operation by the Office of Thrift Supervision ("OTS") regulations. The
Bank's liquidity averaged 10.92% during December, 2002. The Bank adjusts its
liquidity levels in order to meet funding needs for deposit outflows, payments
of real estate taxes from escrow accounts on mortgage loans, repayment of
borrowings, when applicable, and loan funding commitments. The Bank also adjusts
its liquidity level as appropriate to meet its asset/liability objectives. In
addition, the Bank invests its excess funds in federal funds and
interest-bearing deposits with the FHLB-NY, which provides liquidity to meet
lending requirements.

The Bank's liquidity, represented by cash and cash equivalents, is a product of
its operating, investing and financing activities. Cash was generated by
operating activities in each of the above periods. The primary source of cash
from operating activities during each period was net income.

The primary sources of investing activities of the Bank are lending and
investment in mortgage-backed securities. In addition to funding new loan
production and the purchase of mortgage-backed securities through operations and
financing activities, new loan production and purchases of mortgage-backed
securities were also funded by principal repayments on existing loans and
mortgage-backed securities. The primary sources of financing activities during
the 2002 period were net increases in deposits of $29.4 million and net advances
from the FHLB-NY of $17.0 million.

Liquidity management is both a daily and long-term function of business
management. Excess liquidity is generally invested in short-term investments,
such as federal funds and interest-bearing deposits. If the Bank requires funds
beyond its ability to generate them internally, borrowing agreements exist with
the FHLB-NY, which provide an additional source of funds. At December 31, 2002
and 2001, advances from the FHLB-NY amounted to $84.3 million and $67.3 million,
respectively.

The Bank anticipates that it will have sufficient funds available to meet its
current loan commitments. At December 31, 2002, the Bank had outstanding
commitments to originate loans and fund unused credit lines of $28.6 million.
Certificates of deposit scheduled to mature in one year or less, at December 31,
2002, totaled $164.0 million. Management believes that, based upon historical
experience, a significant portion of such deposits will remain with the Bank.

At December 31, 2002, the Bank exceeded each of the three OTS capital
requirements. The Bank's tangible, core and risk-based capital ratios were
7.08%, 7.08% and 14.35%, respectively. The Bank was categorized as
"well-capitalized" under the prompt corrective action regulations of the OTS.

                                                      Pamrapo Bancorp, Inc.   13

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

IMPACT OF INFLATION AND CHANGING PRICES

The consolidated financial statements and the related data presented herein have
been prepared in accordance with accounting principles generally accepted in the
United States of America, which require the measurement of financial position
and operating results in terms of historical dollars, without considering
changes in the relative purchasing power of money over time due to inflation.

Unlike most industrial companies, virtually all of the assets and liabilities of
the Bank are monetary in nature. As a result, interest rates have a more
significant impact on the Bank's performance than the effects of general levels
of inflation. Interest rates do not necessarily move in the same direction or in
the same magnitude as the prices of goods and services because such prices are
affected by inflation to a larger extent than interest rates.

14   Pamrapo Bancorp, Inc.

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                                                                     December 31,
                                                                                       ----------------------------------------
Assets                                                                Note(s)                2001                  2002
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>                 <C>                    <C>
Cash and amounts due from depository institutions                                      $       4,816,866      $       6,172,543
Interest-bearing deposits in other banks                                                      17,872,019             17,684,844
-------------------------------------------------------------------------------------------------------------------------------
  Total cash and cash equivalents                                    1 and 15                 22,688,885             23,857,387
Securities available for sale                                      1,2,9 and 15                5,304,032              4,542,528
Investment securities held to maturity                             1,3,9 and 15                5,000,000              7,095,209
Mortgage-backed securities held to maturity                        1,4,9 and 15              122,417,611            146,138,326
Loans receivable                                                   1,5,9 and 15              369,238,574            389,864,704
Foreclosed real estate                                                   1                       238,141                155,340
Investment in real estate                                                1                       227,033                213,643
Premises and equipment                                              1,6 and 10                 4,830,735              4,417,239
Federal Home Loan Bank of New York stock, at cost                        9                     3,796,100              4,403,400
Interest receivable                                                 1,7 and 15                 2,944,226              2,982,315
Deferred tax asset                                                   1 and 13                  1,221,402                779,394
Other assets                                                            12                     1,732,103              4,209,460
-------------------------------------------------------------------------------------------------------------------------------
      Total assets                                                                     $     539,638,842      $     588,658,945
===============================================================================================================================
Liabilities and stockholders' equity
-------------------------------------------------------------------------------------------------------------------------------
Liabilities
-------------------------------------------------------------------------------------------------------------------------------
Deposits                                                             8 and 15          $     416,586,795      $     445,507,415
Advances from Federal Home Loan Bank of New York                     9 and 15                 67,340,000             84,340,000
Other borrowed money                                                 10 and 15                   178,176                149,166
Advance payments by borrowers for taxes and insurance                                          3,516,532              3,835,862
Other liabilities                                                       12                     4,494,164              4,070,229
-------------------------------------------------------------------------------------------------------------------------------
      Total liabilities                                                                      492,115,667            537,902,672
===============================================================================================================================
Commitments and contingencies                                        14 and 15                         -                      -
Stockholders' equity                                               1,11, and, 13
-------------------------------------------------------------------------------------------------------------------------------
Preferred stock; authorized 3,000,000 shares; issued and
 outstanding - none                                                                                    -                      -
Common stock; par value $.01;authorized 7,000,000 shares;
 shares issued 3,450,000 (2001) and 6,900,000 (2002);
 shares outstanding 2,577,293 (2001) and 5,145,986 (2002)                                         34,500                 69,000
Paid-in capital in excess of par value                                                        18,906,768             18,937,168
Retained earnings - substantially restricted                                                  47,621,056             50,889,220
Accumulated other comprehensive income - Unrealized gain
on securities available for sale, net of income tax                                              195,784                242,546
Treasury stock, at cost; 872,707 shares (2001) and 1,754,014
 shares (2002)                                                                               (19,234,933)           (19,381,661)
-------------------------------------------------------------------------------------------------------------------------------
      Total stockholders' equity                                                              47,523,175             50,756,273
-------------------------------------------------------------------------------------------------------------------------------
      Total liabilities and stockholders' equity                                       $     539,638,842      $     588,658,945
===============================================================================================================================
</TABLE>

See notes to consolidated financial statements.

                                                      Pamrapo Bancorp, Inc.   15

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                                     Year Ended December 31,
                                                                  -------------------------------------------------------------
                                               Note(s)                   2000                  2001                 2002
-------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                <C>                    <C>                   <C>
Interest income:
    Loans                                      1 and 5            $     23,539,700       $     27,480,276      $     29,266,901
    Mortgage-backed securities                    1                      8,113,734              7,924,810             7,764,545
    Investments                                   1                        728,837                596,371               518,481
    Other interest-earning assets                                          779,848                623,336               508,158
-------------------------------------------------------------------------------------------------------------------------------
        Total interest income                                           33,162,119             36,624,793            38,058,085
-------------------------------------------------------------------------------------------------------------------------------
Interest expense:
    Deposits                                      8                     13,760,987             14,908,910            11,482,660
    Advances and other borrowed money                                    1,736,695              2,635,383             3,807,006
-------------------------------------------------------------------------------------------------------------------------------
        Total interest expense                                          15,497,682             17,544,293            15,289,666
-------------------------------------------------------------------------------------------------------------------------------
Net interest income                                                     17,664,437             19,080,500            22,768,419
Provision for loan losses                      1 and 5                     207,879                458,888               634,090
-------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for
 loan losses                                                            17,456,558             18,621,612            22,134,329
-------------------------------------------------------------------------------------------------------------------------------
Non-interest income:
    Fees and service charges                                             1,027,426              1,200,562             1,285,725
    Gain on sale of branches                                                     -                      -               478,563
    Miscellaneous                                                          548,837                720,554               801,605
-------------------------------------------------------------------------------------------------------------------------------
        Total non-interest income                                        1,576,263              1,921,116             2,565,893
-------------------------------------------------------------------------------------------------------------------------------
Non-interest expenses:
    Salaries and employee benefits                12                     6,398,237              6,430,140             7,234,261
    Net occupancy expense of premises          6 and 14                  1,118,931              1,206,893             1,085,575
    Equipment                                     6                      1,113,677              1,354,638             1,282,556
    Advertising                                                            294,275                233,745               181,207
    Federal insurance premium                                               75,579                 74,314                73,019
    Loss on foreclosed real estate                1                         42,875                  7,242                   232
    Amortization of intangibles                   1                         60,649                      -                     -
    Miscellaneous                                                        2,884,329              3,327,375             2,933,748
-------------------------------------------------------------------------------------------------------------------------------
        Total non-interest expenses                                     11,988,552             12,634,347            12,790,598
-------------------------------------------------------------------------------------------------------------------------------
Income before income taxes                                               7,044,269              7,908,381            11,909,624
Income taxes                                   1 and 13                  2,568,659              2,907,980             4,786,232
-------------------------------------------------------------------------------------------------------------------------------
Net income                                                        $      4,475,610       $      5,000,401      $      7,123,392
===============================================================================================================================
Net income per common share:
 Basic/diluted                                    1               $           0.85       $           0.97      $           1.39
===============================================================================================================================
Weighted average number of common
 shares outstanding:
 Basic/diluted                                    1                      5,264,530              5,160,346             5,141,486
===============================================================================================================================
Dividends per common share                        1               $           0.69       $           0.72      $           0.75
===============================================================================================================================
</TABLE>

                                 See notes to consolidated financial statements.

16   Pamrapo Bancorp, Inc.

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
                                                                                     Year Ended December 31,
                                                                      ------------------------------------------------------
                                                                            2000                2001              2002
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                  <C>                <C>
Net income                                                            $      4,475,610     $     5,000,401    $    7,123,392
----------------------------------------------------------------------------------------------------------------------------
Other comprehensive income, net of income taxes:
    Gross unrealized holding gain on securities available for sale             188,167             191,091            97,762
    Deferred income taxes                                                       67,700              68,900            51,000
----------------------------------------------------------------------------------------------------------------------------
    Other comprehensive income                                                 120,467             122,191            46,762
----------------------------------------------------------------------------------------------------------------------------
Comprehensive Income                                                  $      4,596,077     $     5,122,592    $    7,170,154
============================================================================================================================
</TABLE>

See notes to consolidated financial statements.

                                                      Pamrapo Bancorp, Inc.   17

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                                RETAINED EARNINGS -
                                                                       PAID-IN CAPITAL IN         SUBSTANTIALLY
                                                  COMMON STOCK         EXCESS OF PAR VALUE          RESTRICTED
------------------------------------------------------------------------------------------------------------------
<S>                                              <C>                   <C>                      <C>
Balance - December 31,1999                       $        34,500       $        18,906,768      $       45,474,883
Net income for the year ended
  December 31, 2000                                            -                         -               4,475,610
Purchase of treasury stock                                     -                         -                       -
Unrealized gain on
  securities available for sale,
  net of income taxes                                          -                         -                       -
Cash dividends                                                 -                         -              (3,618,057)
------------------------------------------------------------------------------------------------------------------
Balance - December 31, 2000                               34,500                18,906,768              46,332,436
Net income for the year ended
  December 31, 2001                                            -                         -               5,000,401
Purchase of treasury stock                                     -                         -                       -
Unrealized gain on
  securities available for sale,
  net of income taxes                                          -                         -                       -
Cash dividends                                                 -                         -              (3,711,781)
------------------------------------------------------------------------------------------------------------------
Balance - December 31, 2001                               34,500                18,906,768              47,621,056
Net income for the year ended
  December 31, 2002                                            -                         -               7,123,392
Stock split                                               34,500                   (34,500)                      -
Purchase of treasury stock                                     -                         -                       -
Reissuance of treasury stock                                   -                    64,900                       -
Unrealized gain on
  securities available for sale,
  net of income taxes                                          -                         -                       -
Cash dividends                                                 -                         -              (3,855,228)
------------------------------------------------------------------------------------------------------------------
Balance - December 31, 2002                      $        69,000       $        18,937,168      $       50,889,220
==================================================================================================================

<CAPTION>
                                               ACCUMULATED
                                           OTHER COMPREHENSIVE           TREASURY
                                                 INCOME                    STOCK                     TOTAL
------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                       <C>                      <C>
Balance - December 31,1999                 $           (46,874)      $      (16,115,313)      $         48,253,964
Net income for the year ended
  December 31, 2000                                          -                        -                  4,475,610
Purchase of treasury stock                                   -               (2,703,475)                (2,703,475)
Unrealized gain on
  securities available for sale,
  net of income taxes                                  120,467                        -                    120,467
Cash dividends                                               -                        -                 (3,618,057)
------------------------------------------------------------------------------------------------------------------
Balance - December 31, 2000                             73,593              (18,818,788)                46,528,509
Net income for the year ended
  December 31, 2001                                          -                        -                  5,000,401
Purchase of treasury stock                                   -                 (416,145)                  (416,145)
Unrealized gain on
  securities available for sale,
  net of income taxes                                  122,191                        -                    122,191
Cash dividends                                               -                        -                 (3,711,781)
------------------------------------------------------------------------------------------------------------------
Balance - December 31, 2001                            195,784              (19,234,933)                47,523,175
Net income for the year ended
  December 31, 2002                                          -                        -                  7,123,392
Stock split                                                  -                        -                          -
Purchase of treasury stock                                   -                 (279,328)                  (279,328)
Reissuance of treasury stock                                 -                  132,600                    197,500
Unrealized gain on
  securities available for sale,
  net of income taxes                                   46,762                        -                     46,762
Cash dividends                                               -                        -                 (3,855,228)
------------------------------------------------------------------------------------------------------------------
Balance - December 31, 2002                $           242,546       $      (19,381,661)      $         50,756,273
==================================================================================================================
</TABLE>

                                 See notes to consolidated financial statements.

18   Pamrapo Bancorp, Inc.

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                           Year Ended December 31,
                                                                            ----------------------------------------------------
                                                                                 2000               2001               2002
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>               <C>                <C>
Cash flows from operating activities:
    Net income                                                              $    4,475,610    $     5,000,401    $     7,123,392
    Adjustments to reconcile net income to net
       cash provided by operating activities:
       Depreciation of premises and equipment and investment in real
         estate                                                                    575,508            584,996            619,262
       (Accretion) amortization of deferred fees, premiums and
         discounts, net                                                             (7,106)            (7,895)           128,086
       Provision for loan losses                                                   207,879            458,888            634,090
       Provision for losses on foreclosed real estate                               13,500             20,037                  -
       Loss (gain) on sale of foreclosed real estate                                 2,873            (34,359)            (8,349)
       (Gain) on sale of branches                                                        -                  -           (478,563)
       Deferred income taxes (benefit)                                             (18,671)           (26,319)           391,008
       (Increase) in interest receivable                                          (212,076)          (178,242)           (38,089)
       (Increase) in other assets                                                 (216,459)          (440,326)        (2,477,357)
       Amortization of intangibles                                                  60,649                  -                  -
       Increase (decrease) in other liabilities                                  1,217,743           (805,963)          (423,935)
       Distribution of treasury stock                                                    -                  -            197,500
---------------------------------------------------------------------------------------------------------------------------------
           Net cash provided by operating activities                             6,099,450          4,571,218          5,667,045
---------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
    Principal repayments on securities available for sale                          949,784          1,081,230            895,307
    Purchases of securities available for sale                                     (81,087)          (570,385)           (43,590)
    Purchases of investment securities held to maturity                         (1,000,000)        (4,000,000)        (4,110,600)
    Proceeds from calls of investment securities held to maturity                2,000,000          6,000,000          2,000,000
    Principal repayments on mortgage-backed securities held to maturity         18,037,553         30,463,577         44,499,307
    Purchases of mortgage-backed securities held to maturity                   (16,217,257)       (34,155,728)       (68,421,533)
    Proceeds from sales of loans                                                   116,730                  -            147,950
    Purchases of mortgage loans                                                 (1,675,900)                 -                  -
    Net change in loans receivable                                             (39,418,857)       (60,394,792)       (21,311,805)
    Proceeds from sales of foreclosed real estate                                   42,127            335,017             91,150
    Additions to premises and equipment                                         (1,131,746)          (359,171)          (413,813)
    Proceeds from sale of premises and equipment                                         -                  -            221,437
    Purchase of Federal Home Loan Bank of New York stock                          (253,000)          (299,900)          (607,300)
---------------------------------------------------------------------------------------------------------------------------------
           Net cash (used in) investing activities                             (38,631,653)       (61,900,152)       (47,053,490)
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements.

                                                      Pamrapo Bancorp, Inc.   19

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

<TABLE>
<CAPTION>
                                                                                         Year Ended December 31,
                                                                        -------------------------------------------------------
                                                                             2000                2001                 2002
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                 <C>                 <C>
Cash flows from financing activities:
    Net increase in deposits                                            $   17,485,188      $   37,176,939      $    50,726,043
    Cash paid for sale of deposits                                                   -                   -          (21,326,860)
    Advances from Federal Home Loan Bank of New York                        15,000,000          35,000,000           25,000,000
    Repayment of Advances from Federal Home Loan Bank of New York          (10,000,000)         (3,243,100)          (8,000,000)
    Net (decrease) in other borrowed money                                     (24,734)            (26,786)             (29,010)
    Net (decrease) increase in payments by borrowers for taxes and
      insurance                                                               (414,945)            984,838              319,330
    Cash dividends paid                                                     (3,618,057)         (3,711,781)          (3,855,228)
    Purchase of treasury stock                                              (2,703,475)           (416,145)            (279,328)
-------------------------------------------------------------------------------------------------------------------------------
        Net cash provided by financing activities                           15,723,977          65,763,965           42,554,947
-------------------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents                       (16,808,226)          8,435,031            1,168,502
Cash and cash equivalents - beginning                                       31,062,080          14,253,854           22,688,885
-------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents - ending                                      $   14,253,854      $   22,688,885      $    23,857,387
-------------------------------------------------------------------------------------------------------------------------------

Supplemental information:

        Transfer of loans receivable to foreclosed real estate          $      222,376      $       33,264      $             -
-------------------------------------------------------------------------------------------------------------------------------
        Loans to facilitate sales of foreclosed real estate             $            -      $       94,500      $             -
-------------------------------------------------------------------------------------------------------------------------------
        Cash paid during the period for:
           Income taxes                                                 $    2,560,280      $    2,775,334      $     4,830,390
-------------------------------------------------------------------------------------------------------------------------------
           Interest on deposits and borrowings                          $   15,479,682      $   17,551,080      $    15,348,766
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                 See notes to consolidated financial statements.

20   Pamrapo Bancorp, Inc.

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF CONSOLIDATED FINANCIAL STATEMENT PRESENTATION

The consolidated financial statements include the accounts of the Company, its
wholly owned subsidiary, Pamrapo Savings Bank, S.L.A. (the "Bank") and the
Bank's wholly owned subsidiary, Pamrapo Service Corp., Inc. (the "Service
Corp."). The Company's business is conducted principally through the Bank. All
significant intercompany accounts and transactions have been eliminated in
consolidation.

The consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America
("GAAP"). In preparing the consolidated financial statements, management is
required to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the consolidated statement of financial
condition and revenues and expenses for the period then ended. Actual results
could differ significantly from those estimates. Material estimates that are
particularly susceptible to significant changes relate to the determination of
the allowance for loan losses, the assessment of prepayment risks associated
with mortgage-backed securities and the determination of the amount of deferred
tax assets which are more likely than not to be realized. Management believes
that the allowance for loan losses is adequate, prepayment risks associated with
mortgage-backed securities are properly recognized and all deferred tax assets
are more likely than not to be recognized. While management uses available
information to recognize losses on loans, future additions to the allowance for
loan losses may be necessary based on changes in economic conditions in the
market area. Additionally, assessments of prepayment risks related to
mortgage-backed securities are based upon current market conditions, which are
subject to frequent change. Finally, the determination of the amount of deferred
tax assets more likely than not to be realized is dependent on projections of
future earnings, which are subject to frequent change.

In addition, various regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowance for loan losses.
Such agencies may require the Bank to recognize additions to the allowance for
loan losses based on their judgments about information available to them at the
time of their examination.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash and amounts due from depository
institutions and interest-bearing deposits in other banks having original
maturities of three months or less.

INVESTMENT AND MORTGAGE-BACKED SECURITIES

Investments in debt securities that the enterprise has the positive intent and
ability to hold to maturity are classified as held-to-maturity securities and
reported at amortized cost. Debt and equity securities that are bought and held
principally for the purpose of selling them in the near term are classified as
trading securities and reported at fair value, with unrealized holding gains and
losses included in earnings. Debt and equity securities not classified as
trading securities nor as held-to-maturity securities are classified as
available for sale securities and reported at fair value, with unrealized
holding gains or losses, net of deferred income taxes, reported in a separate
component of stockholders' equity.

Premiums and discounts on all securities are amortized/ accreted using the
interest method. Interest and dividend income on securities, which includes
amortization of premiums and accretion of discounts, is recognized in the
consolidated financial statements when earned. The adjusted cost basis of an
identified security sold or called is used for determining security gains and
losses recognized in the consolidated statements of income.

LOANS RECEIVABLE

Loans receivable are stated at unpaid principal balances, less the allowance
for loan losses and net deferred loan origination fees and discounts.

The Bank defers loan origination fees and certain direct loan origination costs
and amortizes/accretes such amounts as an adjustment of yield over the
contractual lives of the related loans. Discounts on loans purchased are
recognized as income by use of the level-yield method over the terms of the
respective loans.

Uncollectible interest on loans is charged off, or an allowance is established
based on management's evaluation. An allowance is established by a charge to
interest income equal to all interest previously accrued, and income is
subsequently recognized only to the extent that cash payments are received
until, in man-

                                                      Pamrapo Bancorp, Inc.   21

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

agement's judgment, the borrower's ability to make periodic interest and
principal payments is probable, in which case the loan is returned to an accrual
status.

ALLOWANCE FOR LOAN LOSSES

An allowance for loan losses is maintained at a level considered adequate to
absorb loan losses. Management of the Bank, in determining the allowance for
loan losses, considers the risks inherent in its loan portfolio and changes in
the nature and volume of its loan activities, along with the general economic
and real estate market conditions.

The Bank utilizes a two tier approach:(1) identification of impaired loans and
the establishment of specific loss allowances, if necessary, on such loans; and
(2) establishment of general valuation allowances on the remainder of its loan
portfolio. The Bank maintains a loan review system which allows for a periodic
review of its loan portfolio and the early identification of potential impaired
loans. Such system takes into consideration, among other things, delinquency
status, size of loans, type of collateral and financial condition of the
borrowers. Specific loan loss allowances are established for identified loans
based on a review of such information and/or appraisals of the underlying
collateral. General loan loss allowances are based upon a combination of factors
including, but not limited to, actual loan loss experience, composition of loan
portfolio, current economic conditions and management's judgment.

Although management believes that adequate specific and general loan loss
allowances are established, actual losses are dependent upon future events and,
as such, further additions to the allowance for loan losses may be necessary.

An impaired loan is evaluated based on the present value of expected future cash
flows discounted at the loan's effective interest rate, or as a practical
expedient, at the loan's observable market price or the fair value of the
collateral if the loan is collateral dependent. A loan evaluated for impairment
is deemed to be impaired when, based on current information and events, it is
probable that the Bank will be unable to collect all amounts due according to
the contractual terms of the loan agreement. An insignificant payment delay,
which is defined as up to ninety days by the Bank, will not cause a loan to be
classified as impaired. A loan is not impaired during a period of delay in
payment if the Bank expects to collect all amounts due, including interest
accrued at the contractual interest rate for the period of delay. Thus, a demand
loan or other loan with no stated maturity is not impaired if the Bank expects
to collect all amounts due, including interest accrued at the contractual
interest rate, during the period the loan is outstanding. All loans identified
as impaired are evaluated independently. The Bank does not aggregate such loans
for evaluation purposes. Payments received on impaired loans are applied first
to accrued interest receivable and then to principal.

FORECLOSED REAL ESTATE AND INVESTMENT IN REAL ESTATE

Real estate acquired by foreclosure or deed in lieu of foreclosure is initially
recorded at the lower of cost or estimated fair value at date of acquisition and
subsequently carried at the lower of such initially recorded amount or estimated
fair value less estimated costs to sell. Costs incurred in developing or
preparing properties for sale are capitalized. Expenses of holding properties
and income from operating properties are recorded in operations as incurred or
earned. Gains and losses from sales of such properties are recognized as
incurred.

Real estate held for investment is carried at cost less accumulated
depreciation. Income and expense of operating the property are recorded in
operations.

PREMISES AND EQUIPMENT

Premises and equipment are comprised of land, at cost, and buildings, building
improvements, leaseholds and furnishings and equipment, at cost, less
accumulated depreciation and amortization. Significant renewals and betterments
are charged to the property and equipment account. Maintenance and repairs are
expensed in the year incurred. Rental income is netted against occupancy expense
in the consolidated statements of income.

INCOME TAXES

The Company, Bank and Service Corp. file a consolidated federal income tax
return. Income taxes are allocated to the Company, Bank and Service Corp. based
on their respective income or loss included in the consolidated income tax
return. Separate state income tax returns are filed by the Company, Bank and
Service Corp.

Federal and state income taxes have been provided on the basis of reported
income. The amounts reflected on the Company's and subsidiaries' tax returns
differ from these provisions due principally to temporary differences in the
reporting of certain items for financial reporting and income tax reporting
purposes.

Deferred income tax expense or benefit is determined by recognizing deferred tax
assets and liabilities for the

22   Pamrapo Bancorp, Inc.

<PAGE>

estimated future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax basis. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in earnings in the period that includes the enactment date. The
realization of deferred tax assets is assessed and a valuation allowance
provided, when necessary, for that portion of the asset which is not likely to
be realized. Management believes, based upon current facts, that it is more
likely than not that there will be sufficient taxable income in future years to
realize the deferred tax assets.

INTEREST-RATE RISK

The Bank is principally engaged in the business of attracting deposits from the
general public and using these deposits, together with borrowings and other
funds, to invest in securities, to make loans secured by real estate and, to a
lesser extent, make consumer loans. The potential for interest-rate risk exists
as a result of the generally shorter duration of the Bank's interest-sensitive
liabilities compared to the generally longer duration of its interest-sensitive
assets. In a rising interest rate environment, liabilities will reprice faster
than assets, thereby reducing net interest income. For this reason, management
regularly monitors the maturity structure of the Bank's assets and liabilities
in order to measure its level of interest-rate risk and to plan for future
volatility.

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used in estimating the fair value of
its financial instruments: Cash and cash equivalents and interest receivable:
The carrying amounts reported in the consolidated financial statements for cash
and cash equivalents and interest receivable approximate their fair values.

Securities: The fair value of securities, as well as commitments to purchase
securities, is determined by reference to quoted market prices, where available.
If quoted market prices are not available, fair values are based on quoted
market prices of comparable instruments.

Loans receivable: Fair value is estimated by discounting the future cash flows,
using the current rates at which similar loans would be made to borrowers with
similar credit ratings and for the same remaining maturities, of such loans.

Deposits: The carrying amounts reported in the consolidated financial statements
for non-interest-bearing demand, NOW, Money Market, savings and club accounts
approximate their fair values. For fixed-maturity certificates of deposit, fair
value is estimated using the rates currently offered for deposits of similar
remaining maturities.

Advances from Federal Home Loan Bank of New York and other borrowed money: Fair
value is estimated using rates currently offered for liabilities of similar
remaining maturities, or when available, quoted market prices.

Commitments to extend credit: The fair value of commitments is estimated using
the fees currently charged to enter into similar agreements, taking into account
the remaining terms of the agreements and the present creditworthiness of the
counterparties. For fixed-rate loan commitments, fair value also considers the
difference between current levels of interest rates and the committed rates.

EXCESS OF COST OVER ASSETS ACQUIRED

The cost in excess of the fair value of net assets (goodwill) acquired through
the acquisition of certain assets and assumption of certain liabilities of
branch offices was amortized to expense over a ten year period by use of the
straight-line method.

NET INCOME PER COMMON SHARE

Basic net income per common share is based on the weighted average number of
common shares actually outstanding. Diluted net income per share is calculated
by adjusting the weighted average number of shares of common stock outstanding
to include the effect of stock options, if dilutive, using the treasury stock
method. During the years ended December 31, 2000, 2001, and 2002, there were no
outstanding securities or contracts that could have been dilutive.

On April 30, 2002, the Board of Directors declared a two-for-one stock split
which was paid on May 29, 2002, in the form of a stock dividend on the Company's
common stock to shareholders of record on May 15, 2002. Net income per common
share, dividends per common share, and weighted average number of common shares
outstanding have been adjusted to reflect the two-for-one stock split.

RECLASSIFICATION

Certain amounts for prior periods have been reclassified to conform to the
current period's presentation.

                                                      Pamrapo Bancorp, Inc.   23

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2.   SECURITIES AVAILABLE FOR SALE

<TABLE>
<CAPTION>
                                                                                   December 31, 2001
-------------------------------------------------------------------------------------------------------------------------------
                                                                                  Gross Unrealized
                                                       Amortized         ----------------------------------         Carrying
                                                          Cost               Gains               Losses              Value
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>                 <C>                 <C>
Mortgage-backed securities                           $    3,092,701      $       45,986      $            -      $    3,138,687
Mutual funds                                              1,398,327                   -               1,045           1,397,282
Trust originated preferred security, maturing
 after twenty years                                         500,000               3,400                   -             503,400
Equity security                                               7,020             257,643                   -             264,663
-------------------------------------------------------------------------------------------------------------------------------
                                                     $    4,998,048      $      307,029      $        1,045      $    5,304,032
===============================================================================================================================

<CAPTION>
                                                                                  DECEMBER 31, 2002
-------------------------------------------------------------------------------------------------------------------------------
                                                                                  GROSS UNREALIZED
                                                       AMORTIZED         ----------------------------------         CARRYING
                                                          COST               GAINS               LOSSES              VALUE
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>                 <C>                 <C>
Mortgage-backed securities                           $    2,189,845      $       58,207      $            -      $    2,248,052
Mutual funds                                              1,441,917                 400                   -           1,442,317
Trust originated preferred security, maturing
 after twenty years                                         500,000              25,000                   -             525,000
Equity security                                               7,020             320,139                   -             327,159
-------------------------------------------------------------------------------------------------------------------------------
                                                     $    4,138,782      $      403,746      $            -      $    4,542,528
===============================================================================================================================
</TABLE>

There were no sales of securities available for sale during the years ended
December 31, 2000, 2001 and 2002.

24   Pamrapo Bancorp, Inc.

<PAGE>

3.   INVESTMENT SECURITIES HELD TO MATURITY

<TABLE>
<CAPTION>
                                                                                December 31, 2001
-------------------------------------------------------------------------------------------------------------------------------
                                                                                 Gross Unrealized
                                                       Amortized         ----------------------------------         Estimated
                                                          Cost               Gains               Losses             Fair Value
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>                 <C>                 <C>
U.S. Government (including agencies):
  Due after five through ten years                   $    2,000,000      $       12,500      $            -      $    2,012,500
Subordinated notes due after five through ten
 years                                                    3,000,000              35,000              30,307           3,004,693
-------------------------------------------------------------------------------------------------------------------------------
                                                     $    5,000,000      $       47,500      $       30,307      $    5,017,193
===============================================================================================================================

<CAPTION>
                                                                                DECEMBER 31, 2002
-------------------------------------------------------------------------------------------------------------------------------
                                                                                 GROSS UNREALIZED
                                                       AMORTIZED         ----------------------------------         ESTIMATED
                                                          COST               GAINS               LOSSES             FAIR VALUE
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>                 <C>                 <C>
Subordinated notes due after five through ten
 years                                               $    7,095,209      $      365,801      $            -      $    7,461,010
===============================================================================================================================
</TABLE>

There were no sales of investment securities held to maturity during the years
ended December 31, 2000, 2001 and 2002.

                                                      Pamrapo Bancorp, Inc.   25

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4.   MORTGAGE-BACKED SECURITIES HELD TO MATURITY

<TABLE>
<CAPTION>
                                                                                December 31, 2001
-----------------------------------------------------------------------------------------------------------------------------
                                                                                Gross Unrealized
                                                  Amortized         ------------------------------------       Estimated
                                                     Cost              Gains                 Losses            Fair Value
-----------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>                   <C>                   <C>               <C>
Federal Home Loan Mortgage Corporation        $      79,433,582     $       1,820,697     $      209,129    $      81,045,150
Federal National Mortgage Association                40,922,509               487,066             16,372           41,393,203
Government National Mortgage Association              2,061,520                77,903                  -            2,139,423
-----------------------------------------------------------------------------------------------------------------------------
                                              $     122,417,611     $       2,385,666     $      225,501    $     124,577,776
=============================================================================================================================

<CAPTION>
                                                                                DECEMBER 31, 2002
-----------------------------------------------------------------------------------------------------------------------------
                                                                                GROSS UNREALIZED
                                                  AMORTIZED         ------------------------------------       ESTIMATED
                                                     COST              GAINS                 LOSSES            FAIR VALUE
-----------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>                   <C>                   <C>               <C>
Federal Home Loan Mortgage Corporation        $      98,734,189     $       3,871,401     $            -    $     102,605,590
Federal National Mortgage Association                38,481,631             1,718,481              1,385           40,198,727
Government National Mortgage Association              1,217,349                91,901                  -            1,309,250
Collateralized Mortgage Obligations                   7,705,157               153,372                  -            7,858,529
-----------------------------------------------------------------------------------------------------------------------------
                                              $     146,138,326     $       5,835,155     $        1,385    $     151,972,096
=============================================================================================================================
</TABLE>

There were no sales of mortgage-backed securities held to maturity during the
years ended December 31, 2000, 2001 and 2002.

26   Pamrapo Bancorp, Inc.

<PAGE>

5.   LOANS RECEIVABLE

<TABLE>
<CAPTION>
                                                                  December 31,
----------------------------------------------------------------------------------------
                                                            2001              2002
----------------------------------------------------------------------------------------
<S>                                                    <C>               <C>
Real estate mortgage:
  One-to-four family                                   $   230,374,470   $   253,972,105
  Multi-family                                              44,616,664        37,069,398
  Commercial                                                28,258,043        31,624,172
  FHA insured and VA guaranteed                                285,891           186,109
----------------------------------------------------------------------------------------
                                                           303,535,068       322,851,784
----------------------------------------------------------------------------------------
Real estate construction                                     7,067,870         6,519,779
----------------------------------------------------------------------------------------
Land                                                         1,403,441         1,372,803
----------------------------------------------------------------------------------------
Commercial                                                   1,262,477           658,216
----------------------------------------------------------------------------------------
Consumer:
  Passbook or certificate                                      688,520           552,252
  Home improvement                                             575,917           336,268
  Equity and second mortgage                                56,958,107        59,233,431
  Automobile                                                 1,484,381         1,243,333
  Personal                                                   1,293,763         1,297,740
----------------------------------------------------------------------------------------
                                                            61,000,688        62,663,024
----------------------------------------------------------------------------------------
     Total                                                 374,269,544       394,065,606
----------------------------------------------------------------------------------------
Less:
  Loans in process                                           2,271,587         1,882,044
  Allowance for loan losses                                  2,150,000         2,550,000
  Deferred loan fees (costs) and discounts                    609,383            (231,142)
----------------------------------------------------------------------------------------
                                                             5,030,970         4,200,902
----------------------------------------------------------------------------------------
                                                       $   369,238,574   $   389,864,704
========================================================================================
</TABLE>

At December 31, 2000, 2001 and 2002, loans serviced by the Bank for the benefit
of others totaled approximately $2,249,000, $1,584,000 and $1,104,000,
respectively.

At December 31, 2000, 2001 and 2002, nonaccrual loans for which interest has
been discontinued totaled approximately $2,703,000, $2,256,000, and $1,485,000,
respectively. During the years ended December 31, 2000, 2001 and 2002, the Bank
recognized interest income of approximately $71,000, $88,000, and $24,000,
respectively, on these loans. Interest income that would have been recorded, had
the loans been on the accrual status, would have amounted to approximately
$270,000, $230,000, and $151,000 for the years ended December 31, 2000, 2001 and
2002, respectively. The Bank is not committed to lend additional funds to the
borrowers whose loans have been placed on nonaccrual status.

The following is an analysis of the allowance for loan losses:

<TABLE>
<CAPTION>
                                                             Year Ended December 31,
-----------------------------------------------------------------------------------------------
                                                       2000            2001            2002
-----------------------------------------------------------------------------------------------
<S>                                                <C>             <C>             <C>
Balance, beginning                                 $  2,000,000    $  1,950,000    $  2,150,000
Provisions charged to operations                        207,879         458,888         634,090
Recoveries credited to allowance                          9,860          14,432          10,346
Loan losses charged to allowance                       (267,739)       (273,320)       (244,436)
-----------------------------------------------------------------------------------------------
Balance, ending                                    $  1,950,000    $  2,150,000    $  2,550,000
===============================================================================================
</TABLE>

Impaired loans and related amounts recorded in the allowance for loan losses are
summarized as follows:

                                                          December 31,
-----------------------------------------------------------------------------
                                                      2001           2002
-----------------------------------------------------------------------------
Recorded investment in impaired loans:
 With recorded allowances                         $     41,487   $     32,959
 Without recorded allowances                         2,183,808      1,566,438
-----------------------------------------------------------------------------
   Total impaired loans                              2,225,295      1,599,397
   Related allowance for loan losses                    41,487         32,959
-----------------------------------------------------------------------------
   Net impaired loans                             $  2,183,808   $  1,566,438
=============================================================================

The activity with respect to loans to directors, officers and associates of such
persons, is as follows:

                                                   Year Ended December 31,
--------------------------------------------------------------------------
                                                                  2002
--------------------------------------------------------------------------
Balance, beginning                                            $  2,151,266
Loans originated                                                   686,281
Now associated                                                      93,840
Collection of principal                                           (821,850)
--------------------------------------------------------------------------
Balance, ending                                               $  2,109,537
==========================================================================

                                                     Pamrapo Bancorp, Inc.    27

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

6.   PREMISES AND EQUIPMENT

                                                         December 31,
----------------------------------------------------------------------------
                                                     2001           2002
----------------------------------------------------------------------------
Land                                             $    701,625   $    701,625
----------------------------------------------------------------------------
Buildings and improvements                          4,027,388      4,027,388
Less accumulated depreciation                       1,686,978      1,817,150
----------------------------------------------------------------------------
                                                    2,340,410      2,210,238
----------------------------------------------------------------------------
Leasehold improvements                              1,590,555      1,190,690
Less accumulated amortization                         573,690        516,257
----------------------------------------------------------------------------
                                                    1,016,865        674,433
----------------------------------------------------------------------------
Furnishings and equipment                           5,443,180      5,693,398
Less accumulated depreciation                       4,671,345      4,862,455
----------------------------------------------------------------------------
                                                      771,835        830,943
----------------------------------------------------------------------------
                                                 $  4,830,735   $  4,417,239
============================================================================

Depreciation expense for the years ended December 31, 2000, 2001, and 2002
totaled approximately $561,000,$571,000, and $606,000, respectively.

Depreciation charges are computed on the straight-line method over the following
estimated useful lives:

----------------------------------------------------
Buildings and improvements            10 to 50 years
Leasehold improvements                10 years
Furnishings and equipment             3 to 10 years
----------------------------------------------------

7.   INTEREST RECEIVABLE

                                                        December 31,
---------------------------------------------------------------------------
                                                    2001           2002
---------------------------------------------------------------------------
Loans, net of allowance for uncollected
 interest of approximately $136,000 and
 $130,000, respectively                         $  2,126,962   $  2,078,868
Mortgage-backed securities                           711,617        756,356
Investment securities                                105,647        147,091
---------------------------------------------------------------------------
                                                $  2,944,226   $  2,982,315
===========================================================================

28   Pamrapo Bancorp, Inc.

<PAGE>

8.   DEPOSITS

<TABLE>
<CAPTION>
                                                                         December 31,
-----------------------------------------------------------------------------------------------------------------------------
                                                      2001                                            2002
-----------------------------------------------------------------------------------------------------------------------------
                                   Weighted                                       WEIGHTED
                                   Average                                         AVERAGE
                                    Rate             Amount        Percent          RATE             AMOUNT        PERCENT
-----------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>     <C>                    <C>              <C>     <C>                    <C>
Demand:
  Non-interest-bearing demand           0.00%   $   26,247,595           6.30           0.00%   $   26,313,782           5.91
  NOW                                   1.50%       32,335,151           7.76           1.26%       33,200,162           7.45
-----------------------------------------------------------------------------------------------------------------------------
                                        0.83%       58,582,746          14.06           0.70%       59,513,944          13.36
Money Market                            2.22%       28,292,792           6.79           2.11%       32,594,320           7.31
Savings and club                        2.33%      137,112,652          32.92           2.34%      155,430,932          34.89
Certificates of deposit                 4.29%      192,598,605          46.23           3.18%      197,968,219          44.44
-----------------------------------------------------------------------------------------------------------------------------
                                        3.02%   $  416,586,795         100.00           2.48%   $  445,507,415         100.00
=============================================================================================================================
</TABLE>

The scheduled maturities of certificates of deposit are as follows (in
thousands):

                                                      December 31,
-------------------------------------------------------------------------
Maturity Period                                   2001           2002
-------------------------------------------------------------------------
One year or less                              $    164,029   $    164,187
After one to three years                            25,811         30,150
After three years                                    2,759          3,631
-------------------------------------------------------------------------
                                              $    192,599   $    197,968
-------------------------------------------------------------------------

Certificates of deposit of $100,000 or more by the time remaining until maturity
are as follows (in thousands):

                                                      December 31,
-------------------------------------------------------------------------
Maturity Period                                   2001           2002
-------------------------------------------------------------------------
Three months or less                          $     17,394   $     11,880
After three through six months                      11,743         12,107
After six through twelve months                     18,467         24,510
After twelve months                                  8,231          9,346
-------------------------------------------------------------------------
                                              $     55,835   $     57,843
=========================================================================

A summary of interest on deposits follows:

<TABLE>
<CAPTION>
                                                               Year Ended December 31,
------------------------------------------------------------------------------------------------
                                                        2000            2001            2002
------------------------------------------------------------------------------------------------
<S>                                                 <C>             <C>             <C>
Demand                                              $  1,225,308    $  1,147,870    $  1,080,086
Savings and club                                       2,629,007       3,281,412       3,428,455
Certificates of deposit                                9,923,003      10,490,771       6,983,647
------------------------------------------------------------------------------------------------
                                                      13,777,318      14,920,053      11,492,188
Less penalties for early withdrawal of
 certificates of deposit                                 (16,331)        (11,143)         (9,528)
------------------------------------------------------------------------------------------------
                                                    $ 13,760,987    $ 14,908,910    $ 11,482,660
================================================================================================
</TABLE>

                                                     Pamrapo Bancorp, Inc.    29

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

9.   ADVANCES FROM FEDERAL HOME LOAN BANK OF NEW YORK

<TABLE>
<CAPTION>
                                                       December 31,
-------------------------------------------------------------------------------------------
                                           2001                            2002
-------------------------------------------------------------------------------------------
                                   Weighted                        Weighted
Maturing                            Average                         Average
by                                 Interest                        Interest
December 31,                           Rate          Amount            Rate          Amount
-------------------------------------------------------------------------------------------
<S>                                    <C>     <C>                     <C>     <C>
2002                                   5.57%   $  8,000,000               -%   $          -
2003                                   5.50%     27,340,000            5.50%     27,340,000
2004                                   4.04%      5,000,000            3.49%     12,000,000
2005                                   4.54%      5,000,000            3.98%     13,000,000
2006                                   4.84%      5,000,000            4.47%     12,000,000
2007                                      -%              -            3.50%      3,000,000
2008                                   4.85%      7,000,000            4.85%      7,000,000
2010                                   6.19%     10,000,000            6.19%     10,000,000
-------------------------------------------------------------------------------------------
                                       5.32%   $ 67,340,000            4.79%   $ 84,340,000
===========================================================================================
</TABLE>

At December 31, 2001 and 2002, the advances were secured by pledges of the
Bank's investment in the capital stock of the Federal Home Loan Bank of New York
totaling $3,796,100, and $4,403,400 respectively, and a blanket assignment of
the Bank's unpledged qualifying mortgage loans, mortgage-backed securities and
investment securities portfolios.

10.  OTHER BORROWED MONEY

                                 December 31,
---------------------------------------------------------------
                        2001                            2002
---------------------------------------------------------------
                 Interest              Interest
                     Rate      Amount      Rate         Amount
---------------------------------------------------------------
Mortgage loan        8.00%  $  178,176      8.00%    $  149,166
===============================================================

The mortgage loan is payable in 144 equal monthly installments of $3,518 through
February 1, 2007 and is secured by premises with a carrying value of $1,370,000
and $1,340,000 at December 31, 2001 and 2002, respectively.

11.  REGULATORY CAPITAL

For the purpose of granting to eligible account holders a priority in the event
of future liquidation, the Bank, at the time of conversion, established a
special account in an amount equal to its total retained earnings of $18.4
million at June 30,1989. In the event of a future liquidation of the converted
Bank (and only in such event), an eligible account holder who continues to
maintain his deposit account shall be entitled to receive a distribution from
the special account. The total amount of the special account is decreased (but
never increased) in an amount proportionately corresponding to decreases in the
deposit account balances of eligible account holders as of each subsequent year
end. After conversion, no dividends may be paid to stockholders if such
dividends would reduce the retained earnings of the converted Bank below the
amount required by the special account.

The Bank is subject to various regulatory capital requirements administered by
the banking agencies. Failure to meet minimum capital requirements can initiate
certain mandatory, and possibly additional discretionary, actions by regulators
that, if undertaken, could have a direct material effect on the Bank. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Bank must meet specific capital guidelines that involve quantitative
measures of the Bank's assets, liabilities, and certain off-balance-sheet items
as calculated under regulatory accounting practices. The Bank's capital amounts
and classification are also subject to qualitative judgments by the regulators
about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios of Total and Tier 1
capital (as defined in the regulations) to risk-weighted assets (as defined),
and of Tier 1 capital to adjusted total assets (as defined). The following
tables present a reconciliation of capital per GAAP and regulatory capital and
information as to the Bank's capital levels at the dates presented:

<TABLE>
<CAPTION>
                                                             December 31,
---------------------------------------------------------------------------------
                                                         2001            2002
---------------------------------------------------------------------------------
<S>                                                  <C>             <C>
GAAP capital                                         $     41,205    $     43,757
Less:  Investment in and advances
        to non-includable subsidiary                       (2,017)         (2,040)
       Unrealized (gain) on
        securities available for sale                        (196)           (243)
---------------------------------------------------------------------------------
Core and tangible capital                                  38,992          41,474
Add: general valuation allowance                            2,108           2,517
---------------------------------------------------------------------------------
       Total regulatory capital                      $     41,100    $     43,991
=================================================================================
</TABLE>

30   Pamrapo Bancorp, Inc.

<PAGE>

<TABLE>
<CAPTION>
                                                                                                           To Be Well
                                                                                                          Capitalized
                                                                                                          Under Prompt
                                                                            Minimum Capital                Corrective
(Dollars in Thousands)                            Actual                     Requirements              Action Provisions
------------------------------------------------------------------------------------------------------------------------------
                                          Amount           Ratio        Amount           Ratio        Amount           Ratio
------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>               <C>         <C>                <C>        <C>               <C>
December 31, 2001:
Total Capital
 (to risk-weighted assets)               $ 41,100          14.43%      $ 22,789           8.00%      $ 28,487          10.00%
Tier 1 Capital
 (to risk-weighted assets)                 38,993          13.69%             -              -         17,092           6.00%
Core (Tier 1) Capital
 (to adjusted total assets)                38,993           7.26%        21,489           4.00%        26,861           5.00%
Tangible Capital
 (to adjusted total assets)                38,993           7.26%         8,058           1.50%             -              -

DECEMBER 31, 2002:
Total Capital
 (to risk-weighted assets)               $ 43,991          14.35%      $ 24,518           8.00%      $ 30,648          10.00%
Tier 1 Capital
 (to risk-weighted assets)                 41,474          13.53%             -              -         18,389           6.00%
Core (Tier 1) Capital
 (to adjusted total assets)                41,474           7.08%        23,440           4.00%        29,300           5.00%
Tangible Capital
 (to adjusted total assets)                41,474           7.08%         8,790           1.50%             -              -
</TABLE>

As of September 30, 2001, the most recent notification from the Office of Thrift
Supervision, the Bank was categorized as well capitalized under the regulatory
framework for prompt corrective action. There are no conditions existing or
events which have occurred since notification that management believes have
changed the institution's category.

                                                      Pamrapo Bancorp, Inc.   31

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

12.  BENEFIT PLANS

PENSION PLAN ("PLAN")

The Bank has a non-contributory defined benefit pension plan covering all
eligible employees. The benefits are based on years of service and employees'
compensation. The Bank's funding policy is to contribute the maximum amount that
can be deducted for federal income tax purposes. The Plan's assets consist
primarily of mutual funds and bank deposits.

The following tables set forth the Plan's funded status and components of net
periodic pension cost:

<TABLE>
<CAPTION>
                                                                 December 31,
----------------------------------------------------------------------------------------
                                                          2001                2002
----------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>
CHANGE IN BENEFIT OBLIGATION

Benefit obligation at
 beginning of year                                   $     3,730,084     $     4,470,707
Service cost                                                 192,887             230,791
Interest cost                                                296,009             336,367
Actuarial loss                                               352,452             752,164
Benefits paid                                               (100,725)           (119,682)
----------------------------------------------------------------------------------------
Benefit obligation at
 end of year                                         $     4,470,707     $     5,670,347
========================================================================================
CHANGE IN PLAN ASSETS

Fair value of assets at
 beginning of year                                   $     3,410,719     $     3,408,608
Actual loss on plan assets                                  (238,917)           (181,718)
Employer contributions                                       337,531           2,336,814
Benefits paid                                               (100,725)           (119,682)
----------------------------------------------------------------------------------------
Fair value of assets at
 end of year                                         $     3,408,608     $     5,444,022
========================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                                 December 31,
----------------------------------------------------------------------------------------
                                                           2001                2002
----------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>
RECONCILIATION OF FUNDED STATUS

Accumulated benefit
 obligation                                          $     3,634,438     $     4,918,612
========================================================================================
Projected benefit obligation                         $     4,470,707     $     5,670,347
Fair value of assets                                      (3,408,608)         (5,444,022)
----------------------------------------------------------------------------------------
Funded status                                              1,062,099             226,325
Contributed in fourth
 quarter                                                    (412,777)                  -
Unrecognized net (loss)                                   (1,266,737)         (2,295,871)
Unrecognized past service
 liability                                                         -            (161,550)
----------------------------------------------------------------------------------------
(Prepaid) expense included
 in other assets                                     $      (617,415)    $    (2,231,096)
========================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
--------------------------------------------------------------------------------------------------------------------
                                                          2000                2001                        2002
--------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>                         <C>
NET PERIODIC PENSION EXPENSE

Service cost                                         $       168,854     $       192,887             $       230,791
Interest cost                                                273,500             296,009                     336,367
Expected return on assets                                   (259,404)           (297,851)                   (338,524)
Amortization of unrecognized loss                                  -               1,256                      68,393
Unrecognized past service liability                                -                   -                      13,329
--------------------------------------------------------------------------------------------------------------------
Net periodic pension expense                         $       182,950     $       192,301             $       310,356
====================================================================================================================
</TABLE>

Assumptions used in the accounting for the Plan are as follows:

<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
--------------------------------------------------------------------------------------------------------------------
                                                          2000                2001                        2002
--------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                 <C>                         <C>
Discount rate                                                   8.00%               8.00%                       7.25%
Rate of increase in compensation                                5.00%               5.00%                       4.50%
Long-term rate of return on plan assets                         8.50%               8.50%                       8.50%
====================================================================================================================
</TABLE>

SAVINGS AND INVESTMENT PLAN ("SIP")

The Bank sponsors a SIP pursuant to Section 401(k) of the Internal Revenue Code,
for all eligible employees. Employees may elect to save up to 10% of their
compensation of which the Savings Bank will match 50% of the employee's
contribution. The SIP expense amounted to approximately, $118,000, $106,000
and $124,000 for the years ended December 31, 2000, 2001 and 2002,
respectively.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("SERP")

The Bank has an unfunded non-qualified deferred retirement plan for certain
employees. A participant who retires at age 65 (the "Normal Retirement Age"), is
entitled to an annual retirement benefit equal to 75% of his compensation
reduced by his retirement plan annual benefits. Participants retiring before the
Normal Retirement Age receive the same benefits reduced by a percentage based on
years of service to the Bank and the number of years prior to the Normal
Retirement Age that participant retires.

32   Pamrapo Bancorp, Inc.

<PAGE>

The following tables set forth the SERP's funded status and components of net
periodic SERP cost:

                                                      December 31,
----------------------------------------------------------------------------
                                                2001              2002
----------------------------------------------------------------------------
Projected benefit obligation
 - at beginning of year                    $     2,094,942   $     2,596,758
Service cost                                             -           (11,265)
Interest cost                                      173,378           177,653
Actuarial loss                                     153,493           345,576
Benefit payments                                  (121,497)          (33,456)
Plan amendment                                     296,442          (284,504)
----------------------------------------------------------------------------
Projected benefit obligation
 - at end of year                                2,596,758         2,790,762
Plan assets at fair value                                -                 -
----------------------------------------------------------------------------
Projected benefit obligation
 in excess of plan assets                        2,596,758         2,790,762
Unrecognized net loss                             (622,887)         (895,743)
Benefit paid in fourth quarter                           -           (64,928)
Unrecognized past service
 liability                                        (985,122)         (588,702)
----------------------------------------------------------------------------
Accrued SERP cost included
 in other liabilities                      $       988,749   $     1,241,389
============================================================================
Net periodic SERP cost included the following components:

                                   Year Ended December 31,
-------------------------------------------------------------------
                             2000           2001           2002
-------------------------------------------------------------------
  Service cost           $          -   $          -   $    (11,265)
  Interest cost               153,150        173,378        177,653
  Net amortization            113,842        150,029        184,636
-------------------------------------------------------------------
Net periodic SERP cost   $    266,992   $    323,407   $    351,024
===================================================================
Contributions made       $     66,901   $    121,497   $    163,312
===================================================================

Assumptions used in the accounting for the SERP are as follows:

                         Year Ended December 31,
------------------------------------------------
                           2000     2001    2002
------------------------------------------------
Discount rate              8.00%    8.00%   7.25%
Rate of increase in
 compensation              5.50%    5.50%   4.50%
Amortization period
 (in years)                7.96     6.37    4.94
================================================
13. INCOME TAXES

The Bank qualifies as a savings institution under the provisions of the Internal
Revenue Code and was therefore, prior to January 1, 1996, permitted to deduct
from taxable income an allowance for bad debts based upon eight percent of
taxable income before such deduction, less certain adjustments. Retained
earnings at December 31, 2002, include approximately $6,907,000 of such bad
debt, which, in accordance with SFAS No. 109, "Accounting for Income Taxes," is
considered a permanent difference between the book and income tax basis of loans
receivable, and for which income taxes have not been provided. If such amount is
used for purposes other than for bad debt losses, including distributions in
liquidation, it will be subject to income tax at the then current rate.

The tax effects of existing temporary differences which give rise to significant
portions of deferred tax assets and deferred tax liabilities are as follows:

                                                          December 31,
-----------------------------------------------------------------------------
                                                      2001           2002
-----------------------------------------------------------------------------
Deferred tax assets
Allowance for losses                              $    799,451   $  1,044,130
Deferred loan fees                                     174,844        130,326
Depreciation                                           129,356         98,391
Reserve for uncollected
 interest                                               48,888         43,677
Benefit plans                                          179,063              -
-----------------------------------------------------------------------------
                                                     1,331,602      1,316,524
-----------------------------------------------------------------------------
Deferred tax liabilities
Benefit plans                                                -        375,930
Unrealized gain on
 securities available for
 sale                                                  110,200        161,200
-----------------------------------------------------------------------------
                                                       110,200        537,130
-----------------------------------------------------------------------------
Net deferred tax assets                           $  1,221,402   $    779,394
=============================================================================

The components of income taxes are summarized as follows:

                       Year Ended December 31,
-------------------------------------------------------
               2000            2001            2002
-------------------------------------------------------
Current    $  2,587,330    $  2,934,299    $  4,395,224
Deferred        (18,671)        (26,319)        391,008
-------------------------------------------------------
           $  2,568,659    $  2,907,980    $  4,786,232
=======================================================

                                                      Pamrapo Bancorp, Inc.   33

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table presents a reconciliation between the reported income taxes
and the income taxes which would be computed by applying the normal federal
income tax rate of 34% to income before income taxes:

<TABLE>
<CAPTION>
                                                      Year Ended December 31,
--------------------------------------------------------------------------------------
                                                2000           2001           2002
--------------------------------------------------------------------------------------
<S>                                         <C>            <C>            <C>
Federal income tax                          $  2,395,051   $  2,688,850   $  4,049,272
Increases in income taxes resulting from:
  New Jersey
   income tax, net of federal income
   tax effect                                    147,989        168,315        603,430
  Other items, net                                25,619         50,815        133,530
--------------------------------------------------------------------------------------
Effective income tax                        $  2,568,659   $  2,907,980   $  4,786,232
======================================================================================
</TABLE>

14.  COMMITMENTS AND CONTINGENCIES

The Bank is party to financial instruments with off-balance sheet risk in the
normal course of business primarily to meet the financing needs of its
customers. These financial instruments include commitments to originate loans
and purchase securities. The commitments involve, to varying degrees, elements
of credit and interest rate risk in excess of the amount recognized in the
consolidated statement of financial condition. The Bank's exposure to credit
loss in the event of nonperformance by the other party to the financial
instrument for commitments to extend credit is represented by the contractual
notional amount of those instruments. The Bank uses the same credit policies in
making commitments as it does for on-balance sheet instruments.

Commitments to originate loans are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. Since commitments may expire without being drawn upon,
the total commitment amounts do not necessarily represent future cash
requirements. The Savings Bank evaluates each customer's creditworthiness on a
case-by-case basis. The amount of collateral obtained, if deemed necessary by
the Bank, upon extension of credit is based on management's credit evaluation of
the counterparty. Collateral held varies but primarily includes residential real
estate and income-producing commercial properties.

The Bank had loan commitments outstanding as follows:

                                    December 31,
-----------------------------------------------------------
                                 2001             2002
-----------------------------------------------------------
To originate loans          $ 27,097,000      $ 18,415,000
===========================================================

At December 31, 2002, all the outstanding commitments to originate loans are at
fixed interest rates which range from 5.75% to 8.25%. All commitments are due to
expire within ninety days.

At December 31, 2002, undisbursed funds from approved lines of credit under a
homeowners' equity and a commercial equity lending program amounted to
approximately $8,487,000 and $1,656,000, respectively. Unless they are
specifically cancelled by notice from the Bank, these funds represent firm
commitments available to the respective borrowers on demand. The interest rates
charged for any month on funds disbursed under these programs range from 0% to
4.25% above the prime rate.

Rental expenses related to the occupancy of premises totaled $306,000, $312,000
and $272,000 for the years ended December 31, 2000, 2001 and 2002, respectively.
At December 31, 2002, minimum non-cancellable obligations under lease agreements
with original terms of more than one year are as follows:

December 31,                                      Amount
---------------------------------------------------------
2003                                        $     174,000
2004                                              158,000
2005                                              161,000
2006                                              165,000
2007                                              166,000
Thereafter                                        378,000
---------------------------------------------------------
                                            $   1,202,000
=========================================================

The Bank is also a party to litigation which arises primarily in the ordinary
course of business. In the opinion of management, the ultimate disposition of
such litigation should not have a material effect on the consolidated financial
position of the Company.

34   Pamrapo Bancorp, Inc.

<PAGE>

15. FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts and fair value of the financial instruments are as follows
(in thousands):

<TABLE>
<CAPTION>
                                                                  December 31, 2001
-------------------------------------------------------------------------------------------------------
                                                          2001                          2002
-------------------------------------------------------------------------------------------------------
                                                Carrying                      CARRYING
                                                 Value        Fair Value       VALUE        FAIR VALUE
-------------------------------------------------------------------------------------------------------
<S>                                           <C>            <C>            <C>            <C>
FINANCIAL ASSETS
Cash and cash equivalents                     $     22,689   $     22,689   $     23,857   $     23,857
Securities available for sale                        5,304          5,304          4,543          4,543
Investment securities held to maturity               5,000          5,017          7,095          7,461
Mortgage-backed securities held to maturity        122,418        124,578        146,138        151,972
Loans receivable                                   369,239        371,477        389,865        400,548
Interest receivable                                  2,944          2,944          2,982          2,982

FINANCIAL LIABILITIES
Deposits                                           416,587        418,319        445,507        446,626
Advances and other borrowed money                   67,518         68,109         84,489         88,896

COMMITMENTS
To originate loans                                  27,097         27,097         18,415         18,415
Unused lines of credit                               8,403          8,403         10,143         10,143
To purchase securities                               5,914          5,914              -              -
</TABLE>

                                                    Pamrapo Bancorp, Inc.     35

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The fair value estimates are made at a discrete point in time based on relevant
market information and information about the financial instruments. Fair value
estimates are based on judgments regarding future expected loss experience,
current economic conditions, risk characteristics of various financial
instruments and other factors. These estimates are subjective in nature and
involve uncertainties and matters of significant judgment and, therefore, cannot
be determined with precision. Changes in assumptions could significantly affect
the estimates. Further, the foregoing estimates may not reflect the actual
amount that could be realized if all or substantially all of the financial
instruments were offered for sale.

In addition, the fair value estimates were based on existing on-and-off balance
sheet financial instruments without attempting to value anticipated future
business and the value of assets and liabilities that are not considered
financial instruments. Other significant assets and liabilities that are not
considered financial assets and liabilities include mortgage servicing rights,
premises and equipment and advances from borrowers for taxes and insurance. In
addition, the tax ramifications related to the realization of the unrealized
gains and losses can have a significant effect on fair value estimates and have
not been considered in any of the estimates.

Finally, reasonable comparability between financial institutions may not be
likely due to the wide range of permitted valuation techniques and numerous
estimates which must be made given the absence of active secondary markets for
many of the financial instruments. This lack of uniform valuation methodologies
introduces a greater degree of subjectivity to these estimated fair values.

16.  PARENT COMPANY FINANCIAL INFORMATION

The following condensed financial statements of the Company should be read in
conjunction with the Notes to Consolidated Financial Statements.

STATEMENTS OF FINANCIAL CONDITION

                                               December 31,
-------------------------------------------------------------------
ASSETS                                     2001            2002
-------------------------------------------------------------------
Cash and cash equivalents              $  6,121,603    $  6,812,987
Investment in subsidiary                 41,204,870      43,757,083
Refundable income taxes                     111,836         120,965
Other assets                                187,866         178,328
-------------------------------------------------------------------
  Total assets                         $ 47,626,175    $ 50,869,363
===================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Other liabilities                      $    103,000    $    113,090
-------------------------------------------------------------------
  Total liabilities                         103,000         113,090
-------------------------------------------------------------------

STOCKHOLDERS' EQUITY

Common stock                                 34,500          69,000

Paid-in-capital in excess
 of par value                            18,906,768      18,937,168
Retained earnings -
 substantially restricted                47,816,840      51,131,766
Treasury stock, at cost                 (19,234,933)    (19,381,661)
-------------------------------------------------------------------
  Total stockholders' equity             47,523,175      50,756,273
-------------------------------------------------------------------
Total liabilities and
 stockholders' equity                  $ 47,626,175    $ 50,869,363
===================================================================

36   Pamrapo Bancorp, Inc.

<PAGE>

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
--------------------------------------------------------------------------------------------------------------
                                                                      2000            2001            2002
--------------------------------------------------------------------------------------------------------------
<S>                                                               <C>             <C>             <C>
Dividends from subsidiary                                         $  7,000,000    $  5,000,000    $  5,000,000
Interest income                                                          6,139           5,306           5,364
--------------------------------------------------------------------------------------------------------------
  Total income                                                       7,006,139       5,005,306       5,005,364
Expenses                                                               392,540         470,761         507,798
--------------------------------------------------------------------------------------------------------------
Income before equity in undistributed earnings of
 subsidiary and income taxes (benefit)                               6,613,599       4,534,545       4,497,566
Equity in undistributed earnings of subsidiary                      (2,250,305)        354,260       2,505,451
--------------------------------------------------------------------------------------------------------------
Income before income taxes (benefit)                                 4,363,294       4,888,805       7,003,017
Income taxes (benefit)                                                (112,316)       (111,596)       (120,375)
--------------------------------------------------------------------------------------------------------------
Net income                                                        $  4,475,610    $  5,000,401    $  7,123,392
==============================================================================================================
</TABLE>

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
--------------------------------------------------------------------------------------------------------------
                                                                      2000            2001            2002
--------------------------------------------------------------------------------------------------------------
<S>                                                               <C>             <C>             <C>
Cash flows from operating activities:
  Net income                                                      $  4,475,610    $  5,000,401    $  7,123,392
  Adjustments to reconcile net income to net
   cash provided by operating activities:
    Equity in undistributed earnings of subsidiary                   2,250,305        (354,260)     (2,505,451)
    Decrease (increase) in refundable income taxes                      93,833         (87,119)         (9,129)
    (Increase) decrease in other assets                                (21,081)          2,193           9,538
    (Decrease) increase in other liabilities                          (307,762)         14,196          10,090
    Distribution of treasury stock                                           -               -         197,500
--------------------------------------------------------------------------------------------------------------
    Net cash provided by operating activities                        6,490,905       4,575,411       4,825,940
--------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Cash dividends paid                                               (3,618,057)     (3,711,781)     (3,855,228)
  Purchase of treasury stock                                        (2,703,475)       (416,145)       (279,328)
--------------------------------------------------------------------------------------------------------------
    Net cash (used in) financing activities                         (6,321,532)     (4,127,926)     (4,134,556)
-------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                              169,373         447,485         691,384
Cash and cash equivalents - beginning                                5,504,745       5,674,118       6,121,603
--------------------------------------------------------------------------------------------------------------
Cash and cash equivalents - ending                                $  5,674,118    $  6,121,603    $  6,812,987
==============================================================================================================
</TABLE>

                                                      Pamrapo Bancorp, Inc.   37

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

17.  QUARTERLY FINANCIAL DATA
     (UNAUDITED)

<TABLE>
<CAPTION>
(In thousands, except for per share amounts)      First         Second          Third         Fourth
Year Ended December 31, 2001                     Quarter        Quarter        Quarter        Quarter
-------------------------------------------------------------------------------------------------------
<S>                                           <C>            <C>            <C>            <C>
Interest income                               $      8,777   $      8,928   $      9,429   $      9,491
Interest expense                                     4,461          4,488          4,474          4,121
-------------------------------------------------------------------------------------------------------
  Net interest income                                4,316          4,440          4,955          5,370
Provision for loan losses                               60             60            150            189
Non-interest income                                    443            392            458            628
Non-interest expenses                                3,046          3,150          3,256          3,183
Income taxes                                           609            599            736            964
-------------------------------------------------------------------------------------------------------
Net income                                    $      1,044   $      1,023   $      1,271   $      1,662
=======================================================================================================
Net income per common share:
  Basic/diluted                               $       0.20   $       0.20   $       0.24   $       0.33
=======================================================================================================
Dividends per common share                    $       0.18   $       0.18   $       0.18   $       0.18
=======================================================================================================

<CAPTION>
(In thousands, except for per share amounts)     FIRST         SECOND          THIRD         FOURTH
YEAR ENDED DECEMBER 31, 2002                    QUARTER        QUARTER        QUARTER        QUARTER
-------------------------------------------------------------------------------------------------------
<S>                                           <C>            <C>            <C>            <C>
Interest income                               $      9,603   $      9,592   $      9,486   $      9,377
Interest expense                                     3,917          3,780          3,812          3,781
-------------------------------------------------------------------------------------------------------
  Net interest income                                5,686          5,812          5,674          5,596
Provision for loan losses                              210            225            125             74
Non-interest income                                    530            504            943            589
Non-interest expenses                                2,966          3,243          3,257          3,325
Income taxes                                         1,109          1,023          1,484          1,170
-------------------------------------------------------------------------------------------------------
Net income                                    $      1,931   $      1,825   $      1,751   $      1,616
=======================================================================================================
Net income per common share:
  Basic/diluted                               $       0.37   $       0.36   $       0.34   $       0.32
=======================================================================================================
Dividends per common share                    $     0.1875   $     0.1875   $     0.1875   $     0.1875
=======================================================================================================
</TABLE>

38   Pamrapo Bancorp, Inc.

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

INDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS

PAMRAPO BANCORP, INC.

We have audited the consolidated statements of financial condition of Pamrapo
Bancorp, Inc. (the "Company") and Subsidiaries as of December 31, 2001 and 2002,
and the related consolidated statements of income, comprehensive income, changes
in stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 2002. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the above mentioned consolidated financial statements present
fairly, in all material respects, the financial position of Pamrapo Bancorp,
Inc. and Subsidiaries as of December 31, 2001 and 2002, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2002, in conformity with accounting principles generally
accepted in the United States of America.

/s/ Radics & Co., LLC

January 31, 2003
Pine Brook, New Jersey

                                                      Pamrapo Bancorp, Inc.   39

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

MANAGEMENT RESPONSIBILITY STATEMENT

Management of Pamrapo Bancorp, Inc. and Subsidiaries is responsible for the
preparation of the consolidated financial statements and all other consolidated
financial information included in this report. Consolidated financial statements
were prepared in accordance with accounting principles generally accepted in the
United States of America.

All consolidated financial information included in the report agrees with the
consolidated financial statements. In preparing the consolidated financial
statements, management makes informed estimates and judgments with consideration
given to materiality about the expected results of various events and
transactions.

Management maintains a system of internal accounting control that includes
personnel selection, appropriate division of responsibilities, and formal
procedures and policies consistent with high standards of accounting and
administrative practice. Consideration has been given to the necessary balance
between the costs of systems of internal control and the benefits derived.

Management reviews and modifies its systems of accounting and internal control
in light of changes in conditions and operations as well as in response to
recommendations from the independent certified public accountants. Management
believes the accounting and internal control systems provide reasonable
assurance that assets are safeguarded and the consolidated financial information
is reliable.

The Board of Directors is responsible for determining that management fulfills
its responsibilities in the preparation of the consolidated financial statements
and the control of operations. The Board appoints the independent certified
public accountants. The Board meets with management, the independent certified
public accountants, and also the internal auditor, approves the overall scope of
audit work and related fee arrangements, and reviews audit reports and findings.


/s/ William J. Campbell

William J. Campbell
President and Chief Executive Officer


/s/ Kenneth D. Walter

Kenneth D. Walter
Vice President-Treasurer and Chief Financial Officer


/s/ Robert A. Hughes

Robert A. Hughes
Vice President

January 31, 2003

40   Pamrapo Bancorp, Inc.

<PAGE>


PAMRAPO BANCORP, INC. AND SUBSIDIARIES

SELECTED CONSOLIDATED FINANCIAL CONDITION AND OPERATING DATA OF THE COMPANY

<TABLE>
<CAPTION>
                                                                   At December 31,
----------------------------------------------------------------------------------------------------------------
(Dollars in thousands)                  1998            1999            2000            2001            2002
----------------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>             <C>             <C>             <C>
FINANCIAL CONDITION DATA:
Total amount of:
Assets                              $    413,474    $    448,020    $    469,558    $    539,639    $    588,659
Loans receivable                         239,010         268,280         309,082         369,239         389,865
Securities available for sale              9,652           6,429           5,713           5,304           4,543
Mortgage-backed securities               120,400         120,824         118,791         122,418         146,138
Investment securities                      1,998           7,996           6,996           5,000           7,095
Deposits                                 325,985         361,925         379,410         416,587         445,507
Advances and other borrowed money         28,836          30,813          35,788          67,518          84,489
Stockholders' equity                      49,773          48,254          46,529          47,523          50,756
</TABLE>

<TABLE>
<CAPTION>
                                                               Year Ended December 31,
----------------------------------------------------------------------------------------------------------------
(Dollars in thousands)                      1998            1999            2000            2001            2002
----------------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>             <C>             <C>             <C>
OPERATING DATA:
Interest income                     $     28,971    $     31,253    $     33,162    $     36,625    $     38,058
Interest expense                          12,428          13,642          15,498          17,544          15,290
----------------------------------------------------------------------------------------------------------------
Net interest income                       16,543          17,611          17,664          19,081          22,768
Provision for loan losses                    292             299             208             459             634
Non-interest income                        1,399           1,565           1,576           1,921           2,566
Non-interest expenses                     10,812          11,464          11,988          12,635          12,791
Income taxes                               2,443           2,696           2,568           2,908           4,786
----------------------------------------------------------------------------------------------------------------
Net income                          $      4,395    $      4,717    $      4,476    $      5,000    $      7,123
================================================================================================================
Net income per share
   Basic                            $       0.78    $       0.85    $       0.85    $       0.97    $       1.39
   Diluted                                  0.78            0.85            0.85            0.97            1.39
================================================================================================================
Dividends per share                 $       0.56    $       0.63    $       0.69    $       0.72    $       0.75
================================================================================================================
Dividend payout ratio                      72.45%          73.35%          80.84%          74.23%          54.12%
================================================================================================================
</TABLE>

                                                      Pamrapo Bancorp, Inc.   41

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

SELECTED CONSOLIDATED FINANCIAL CONDITION AND OPERATING DATA OF THE COMPANY
(continued)

<TABLE>
<CAPTION>
                                                             At or For Year Ended December 31,
------------------------------------------------------------------------------------------------------------------
                                          1998            1999            2000            2001            2002
------------------------------------------------------------------------------------------------------------------
<S>                                          <C>             <C>             <C>             <C>             <C>
SELECTED FINANCIAL RATIOS:
Return on average assets                      1.13%           1.09%           0.99%           0.99%           1.26%
Return on average equity                      8.96%           9.66%           9.57%          10.70%          14.52%
Average equity/average assets                12.64%          11.29%          10.30%           9.24%           8.70%
Interest rate spread                          3.91%           3.76%           3.53%           3.48%           3.78%
Net yield on average
 interest-earning assets                      4.49%           4.28%           4.08%           3.95%           4.18%
Non-interest expenses to
 average assets                               2.79%           2.65%           2.64%           2.50%           2.27%
Equity/total assets                          12.04%          10.77%           9.91%           8.81%           8.62%
Capital ratios:
  Tangible                                   10.05%           9.30%           8.27%           7.26%           7.08%
  Core                                       10.05%           9.30%           8.27%           7.26%           7.08%
  Risk-based                                 21.23%          19.52%          16.29%          14.43%          14.35%
Non-performing loans to
 total assets                                 1.11%           0.94%           0.87%           0.60%           0.46%
Non-performing loans to
 loans receivable                             1.92%           1.57%           1.30%           0.88%           0.69%
Non-performing assets to
 total assets                                 1.40%           1.03%           1.00%           0.65%           0.49%
Allowance for loan losses
 to non-performing loans                     50.00%          47.62%          47.74%          65.95%          94.41%
Average interest-earning
 assets/average interest-bearing
 liabilities                                 1.17x           1.16x           1.15x           1.13x           1.14x
Net interest income after
 provision for loan losses
 to non-interest expenses                    1.50x           1.51x           1.46x           1.47x           1.73x
</TABLE>

42   Pamrapo Bancorp, Inc.

<PAGE>

PAMRAPO BANCORP, INC. AND SUBSIDIARIES

STOCKHOLDER INFORMATION

MARKET FOR COMMON STOCK AND RELATED MATTERS

Pamrapo Bancorp, Inc.'s common stock is presently quoted on the National
Association of Securities Dealers Automated Quotation's National Market System
under the symbol "PBCI." At March 10, 2003, the Corporation's 5,145,986
outstanding shares of common stock were held by approximately 1,300 persons or
entities.

The following table sets forth the high and low closing sales price per common
share for the periods indicated. Such prices do not necessarily reflect retail
markups, markdowns or commissions.

                          CLOSING PRICES
                     -----------------------
QUARTER ENDED           HIGH         LOW
--------------------------------------------
March 31, 2001       $    12.25   $     9.63
June 30, 2001             12.30        11.75
September 30, 2001        13.63        11.65
December 31, 2001         13.10        12.25
March 31, 2002            13.80        13.00
June 30, 2002             16.95        13.60
September 30, 2002        16.64        14.00
December 31, 2002         17.69        15.99

Prices retroactively adjusted for a two-for-one stock split on May 29, 2002

DIVIDENDS WERE PAID AS FOLLOWS:
--------------------------------------------
March, 2001                       $      .18
June, 2001                               .18
September, 2001                          .18
December, 2001                           .18
March, 2002                            .1875
June, 2002                             .1875
September, 2002                        .1875
December, 2002                         .1875

Dividends retroactively adjusted for a two-for-one stock split on May 29, 2002

Future dividend policy will be determined by the Board of Directors after giving
consideration to the Company's financial condition, results of operations, tax
status, industry standards, economic conditions and other factors. Dividends
will also depend upon dividend payments by the Bank to the Corporation, which is
its primary source of income. The Board may also consider the payment of stock
dividends from time to time, in addition to, or in lieu of cash dividends.

Under federal regulations, the Bank may not declare or pay a cash dividend on
any of its common stock if the effect thereof would cause the Bank's regulatory
capital to be reduced below the amount required for the liquidation account or
the regulatory capital requirements imposed by the Office of Thrift Supervision
("OTS"). The Bank must provide at least 30 days advance notice to the OTS before
declaring a dividend.

                                                      Pamrapo Bancorp, Inc.   43